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HQ 223539


May 4, 1992

LIQ-4-01-CO:R:C:E 223539 SLR

CATEGORY: LIQUIDATION PROTEST

District Director
U.S. Customs
909 First Ave., Rm 2039
Seattle, WA 98174

RE: Protest for Further Review No. 3001-91-100773; 19 U.S.C. 1504(a); 19 U.S.C. 1504(b)(1);
19 U.S.C. 1504(b)(2); 19 U.S.C. 1677g(a)

Dear Sir:

The above-referenced protest was forwarded to this office for further review. We have considered the points raised, and our decision follows.

FACTS:

This protest involves various entries filed on July 20, 1983, June 6, 1984, and July 6, 1984. The merchandise is fish netting from Japan -- the subject of an affirmative dumping finding (T.D. 72-158) published by the Department of the Treasury.

Pursuant to the Trade Agreements Act of 1979 (the 1979 Act), all outstanding dumping findings were made subject to administrative review by the Department of Commerce (Commerce) (45 FR 20511). These reviews form the basis for the assessment of antidumping duties on reviewed entries and for cash deposits, including interest, on future entries.

On August 21, 1990, Commerce published the final results of an administrative review pertaining to fish nets and netting from Japan exported by Nagaura Seimosho (the exporter at issue) for the time period 6/1/82 -- 5/31/84 (55 FR 34042). Therein, Customs was instructed to assess antidumping duties against all subject entries of said merchandise at the rate of 18.30 percent ad valorem. Customs issued liquidation instructions to all field offices on November 23, 1990, and the subject entries were liquidated on December 28, 1990.

The protestant-surety, Washington International, protests the liquidation of the subject entries arguing that Customs improperly "extended" liquidation beyond the one year limitation set forth in 19 U.S.C. 1504(a). The protestant-surety maintains that the entries were liquidated "as entered" by operation of law upon the expiration of the one year period.

In the event Customs determines that the entries were liquidated properly, the protestant-surety claims that no interest is due on any amounts owed since at the time of entry no cash deposits covering prospective dumping liabilities were made. Rather, only bonds were posted.

ISSUES:

I. Whether Customs properly extended the liquidation of the subject entries beyond the one year limitation of 19 U.S.C. 1504(a).

II. Whether interest is owed on the antidumping duties imposed.

III. How should the interest be calculated?

LAW AND ANALYSIS:

ISSUE I: Whether Customs properly extended the liquidation of the subject entries beyond the one year limitation of 19 U.S.C. 1504(a).

"Liquidation" of an entry of merchandise is defined as the final computation by the Customs Service of all duties (including any dumping or countervailing duties) accruing on that entry. See generally Ambassador Division of Florsheim Shoes v. United States, 748 F.2d 1560, 1562 (Fed. Cir. 1984). Section 504(a) of the Tariff Act of 1930, as amended (19 U.S.C. 1504(a)), provides that an entry of merchandise not liquidated within one year from the date of entry of such merchandise shall be deemed liquidated at the rate of duty, value, quantity, and amount of duties asserted at the time of entry by the importer, his consignee, or agent. However, Customs is permitted to extend the one year period if additional information is needed for the proper appraisement or classification of the merchandise (19 U.S.C. 1504(b)(1)); if liquidation is suspended by statute or court order (19 U.S.C. 1504(b)(2)); or if the importer, consignee, or his agent requests an extension (19 U.S.C. 1504(b)(3)). Customs must notify the importer of an extension. (As the protestant-surety does not challenge Customs notice of the extension, we will assume it was properly issued.)

An extension of liquidation may be based on 19 U.S.C. 1504(b)(1) if Customs has to wait for Commerce to furnish information regarding antidumping liability. American Perimac, Inc. and Boewe Maschinenfabrik, Gmbh v. United States, 10 CIT 535, 538, 642 F. Supp. 1187, 1191 (1986). Consequently, Customs properly extended the liquidation of the subject entries pending the outcome of an administrative review.

The extensions would also be based on 19 U.S.C. 1504(b)(2). Prior to the issuance of T.D. 72-158, the Department of the Treasury, upon a preliminary finding of sales at less than fair market value, published, pursuant to section 201(b) of the Antidumping Act of 1921, as amended (19 U.S.C. 160(b)(1)(B)), a "Withholding of Appraisement Notice" (36 FR 20249) directing officers to withhold the liquidation of fish nets and fish netting from Japan. The Trade Agreements Act of 1979 repealed the Antidumping Act of 1921. Nonetheless, the procedures for imports for which there was a finding of dumping in effect on January 1, 1980 remained in effect under the 1979 Act. Consequently, as the liquidation of the subject merchandise had been suspended by statute, Customs properly extended the liquidation of the subject entries.

ISSUE II: Whether interest is owed on the antidumping duties imposed.

Section 778 of the Tariff Act, as amended (19 U.S.C. 1677g(a)), provides that interest shall be payable on underpayments of amounts deposited on merchandise entered, or withdrawn from warehouse, for consumption on and after the date of an antidumping order.

Interest is collectable only on cash deposits. No cash deposits were required for imports of fish netting from Japan, however, until the publication of a September 22, 1983 administrative review. Consequently, no interest is owed on the July 20, 1983 entry.

Regarding the June 6, 1984 and July 6, 1984 entries, Commerce, on April 30, 1984, published the final results of an administrative review pertaining to fish nets and netting from Japan (49 FR 18339). That review revealed that for the time periods 06/01/80 -- 05/31/81 and 06/01/81 -- 05/31/82, Nagaura Seimosho experienced a dumping margin of 4.30 and 0, respectively. The review indicated that Commerce would issue appraisement instructions on each exporter to the Customs Service. It also directed that, "as provided by [section] 353.28(b) of the Commerce Regulations, a cash deposit of estimated antidumping duties based upon the most recent of the above margins shall be required on all shipments of Japanese fish netting of man-made fibers from these firms entered, or withdrawn
from warehouse, for consumption on or after the date of the publication of this notice" (49 FR 18341).

Pursuant to the April 30, 1984 administrative review, no cash deposits were made for the June 6, 1984 and July 6, 1984 entries since the most recent dumping margin for Nagaura was "0". Nevertheless, a requirement of a deposit of zero dollars is a requirement of a cash deposit, and as an antidumping duty of 18.30 percent ad valorem was ultimately determined, interest is owed on the underpayment of duties on these entries represented by the difference between the amount deposited (i.e., zero dollars) and the amount ultimately due.

ISSUE III: For the June 6, 1984 and July 6, 1984 entries, how should the interest be calculated?

Formerly, section 778 of the Tariff Act, as amended by the 1979 Act, set the interest rate at 8 percent per annum, or if higher, the rate in effect under section 6621 of title 26 on the date on which the rate or amount of the antidumping duty is finally determined. The interest was simple interest.

Section 778 of the Tariff Act, as amended by the Trade and Tariff Act of 1984 (the 1984 amendment), sets the interest rate in accordance with the rate in effect under 26 U.S.C. 6621. Section 6622 of title 26 provides that interest calculated under section 6621 must be compounded. Thus, interest is compounded and payable at the IRS rate for any period of time during which entries are suspended. Pursuant to this method, the interest payable varies in accordance with interest set forth under section 6621 for the periods of suspension. The 1984 amendment to the Tariff Act became effective on October 30, 1984.

In 1986, Congress clarified the effective date of the 1984 amendment by indicating that the 1984 amendment should apply to all entries unliquidated on or after November 4, 1984. 19 U.S.C. 1671 note (1980 & Supp. 1991). The Court of International Trade, however, later held that the 1984 amendment could not be applied for interest accruing before the effective date of the amendment; rather, the 1984 amendment should apply for interest accruing subsequent to that date. Canadian Fur Trappers Corp. v. United States, 12 CIT 612, 691 F. Supp. 364 (1988), affd, 884 F.2d 563 (Fed. Cir. 1989). For the June 6, 1984 and July 6, 1984 entries, therefore, for the time period prior to November 4, 1984, interest accrues according to the 1979 Act. Otherwise, interest accrues according to the 1984 amendment.

HOLDING:

Customs properly extended the liquidation of the July 20, 1983, June 6, 1984, and July 6, 1984 entries. Moreover, interest on underpayments of estimated dumping duties is owed on the June 6, 1984 and July 6, 1984 entries. Customs, however, cannot assess interest against the July 20, 1983 entry. Consequently, you are instructed to grant the protest in part. A copy of this decision should be attached to the Form 19 Notice of Action.

Sincerely,

John Durant, Director
Commercial Rulings Division

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